This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

A Generalised Model of Monopsony

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Alan Manning

Additional information is available for the following registered author(s):

Abstract

Recent research in labour economics (e.g. the work of Card and Krueger, 1995, on the impact of minimum wages) has led to renewed interest in the appropriate model to use when thinking about the labour market. But, the standard textbook models of both perfect competition and monopsony are both implausible, though for different reasons. The competitive model because it assumes the wage elasticity of the supply of labour to the individual firm is infinite and the monopsony model because it assumes that an employer cannot do anything to raise employment other than raise the wage. This paper presents a more general but very simple model in which the employer can also raise employment by increasing expenditure on recruitment. Using this, it is shown how that division between perfect competition and monopsony is not the issue of whether the wage elasticity in labour supply is infinite or finite (as it is usually presented) but whether there are diseconomies of scale in recruitment. Using a unique British data set containing information on both labour turnover costs and the number of recruits, we present estimates that do suggest that there is an increasing marginal cost of recruitment.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help file. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://cep.lse.ac.uk/pubs/download/dp0499.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number 0499.

Download reference. The following formats are available: HTML, plain text, BibTeX, RIS (EndNote), ReDIF
Length:
Date of creation: Jul 2001
Date of revision:
Handle: RePEc:cep:cepdps:0499

Contact details of provider:
Web page: http://cep.lse.ac.uk/pubs/

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords: Labour Turnover

Other versions of this item:

Find related papers by JEL classification:
J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Stephen Nickell & Glenda Quintini, 2003. "Nominal wage rigidity and the rate of inflation," Economic Journal, Royal Economic Society, vol. 113(490), pages 762-781, October. [Downloadable!] (restricted)
    Other versions:
  2. Burgess, Simon & Turon, Hélène, 2000. "Unemployment Dynamics, Duration and Equilibrium: Evidence from Britain," CEPR Discussion Papers 2490, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Simon Burgess & Julia Lane & David Stevens, 2001. "Jobs, Workers and Changes in Earnings Dispersion," CEP Discussion Papers 0491, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  4. Stephen Redding & Anthony J. Venables, 2001. "Economic Geography and International Inequality," International Trade 0103003, EconWPA. [Downloadable!]
    Other versions:
  5. Daniel Sullivan, 1989. "Monopsony Power in the Market for Nurses," NBER Working Papers 3031, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. M Dabrowski & S Gomulka & J Rostowski, 2000. "Whence Reform? A Critique of the Stiglitz Perspective," CEP Discussion Papers 0471, Centre for Economic Performance, LSE. [Downloadable!]
  7. H G Overman & Y Ioannides, 2000. "Cross Sectional Evolution of the US City Size Distribution," CEP Discussion Papers 0483, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  8. H G Overman & Y Ioannides, 2000. "Zipfs Law for Cities: An Empirical Examination," CEP Discussion Papers 0484, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  9. Adriana Di Liberto & James Symons, 2001. "Education and Italian Regional Development," CEP Discussion Papers 0496, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  10. B Bell & S Nickell & G Quintini, 2000. "Wage Equations, Wage Curves and All That," CEP Discussion Papers 0472, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  11. Sullivan, Daniel, 1989. "Monopsony Power in the Market for Nurses," Journal of Law & Economics, University of Chicago Press, vol. 32(2), pages S135-78, October.
  12. D Marsden & S French & K Kubo, 2000. "Why Does Performance Pay De-Motivate: Financial Incentives versus Perfrormance Appraisal," CEP Discussion Papers 0476, Centre for Economic Performance, LSE. [Downloadable!]
  13. S. Burgess & S. Profit, . "Externalities in the Matching of Workers and Firms in Britain," Sonderforschungsbereich 373 1998-19, Humboldt Universitaet Berlin.
    Other versions:
  14. S Nickell & J Van Reenen, 2001. "Technological Innovation and Performance in the United Kingdom," CEP Discussion Papers 0488, Centre for Economic Performance, LSE.
  15. Yannis M. Ioannides & Henry G. Overman, 2000. "Spatial Evolution of the US Urban System," Discussion Papers Series, Department of Economics, Tufts University 0018, Department of Economics, Tufts University. [Downloadable!]
    Other versions:
  16. H G Overman, 2000. "Neighbourhood Effects in Small Neighbourhoods," CEP Discussion Papers 0481, Centre for Economic Performance, LSE. [Downloadable!]
  17. B Petrongolo & C A Pissarides, 2000. "Looking Into the Black Box: A Survey of the Matching Function," CEP Discussion Papers 0470, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Jan Rouwendal & Jos van Ommeren, 2007. "Recruitment in a Monopsonistic Labour Market: Will Travel Costs be reimbursed?," Tinbergen Institute Discussion Papers 07-044/3, Tinbergen Institute. [Downloadable!]
Statistics
Access and download statistics

Did you know? It is the publishers that input data about their publications, as there is no staff at RePEc.

This page was last updated on 2008-8-19.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.